Artículo Resultado de Investigación

Chinese Aid to Latin America

and the Caribbean:
Evolution and Prospects
Ayuda al desarrollo de China a América
Latina y el Caribe:
Evolución y perspectivas a futuro

Lorenzo Maggiorelli*

Fecha de recepción: 1 de julio 2017

Fecha de aceptación: 31 de julio 2017

* Lorenzo Maggiaorellu
Candidato doctoral en Ciencia Política de
la Universidad de los Andes y Magister en
Cooperación internacional para el desarrol-
lo. Docente del master en Cooperación y
Desarrollo de la Universidad San Buenaven-
tura, egresado de la Universidad de Belén
(Palestina) y Roma Tre (Italia).

28
 Abstract

Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
In the last decade, China has risen as a very visible player in Latin America and the Caribbean
(LAC), through its foreign aid, its investments and its bilateral trade. While extensive research has
been conducted on Chinese aid to Africa, this paper will focus instead on the Chinese aid to LAC.
After an overview of the historical evolution of Chinese aid to the region, and an attempt to quantify
the amount of Chinese aid received by LAC as compared to other developing regions, this paper
considers the three main motives which may drive China to provide aid, such as the needs of the
recipient, the institutional characteristics of the beneficiary, and the political and economic interests
of the donor country. The article concludes with an appraisal of the potential benefits and negative
impacts of the Sino-LAC relationship, finding among potential concerns the unconditionality of
Chinese foreign aid and its unbalanced trade relationship with the region.

Keywords: China’s Foreign Aid, Emerging Donors, Aid Allocation, Latin American and the
Caribbean.

Resumen
En la última década, China se ha posicionado como un actor muy visible en América Latina y el
Caribe (ALC), a través de su ayuda externa, sus inversiones y su comercio bilateral. Aunque existe
una amplia literatura e investigación sobre los efectos de la ayuda china a África, este documento
se centrará en la ayuda china a ALC. Después de una visión general de la evolución histórica de
la ayuda china a la región y un intento de cuantificar la cantidad de ayuda china recibida por ALC
en comparación con otras regiones en desarrollo, este trabajo considera que son tres los motivos
principales que pueden conducir a China a proporcionar ayuda, tales como la necesidad del
receptor, las características institucionales del beneficiario y los intereses políticos y económicos del
país donante. El artículo concluye con una evaluación de los beneficios potenciales y los impactos
negativos de la relación sino-latinoamericana, encontrando entre posibles preocupaciones la
incondicionalidad de la ayuda externa china y su desequilibrada relación comercial con la región.

Palabras clave: Ayuda Oficial de China, Donantes emergentes, Asignación de la ayuda,

America Latina y el Caribe.

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29
 Introduction
Lorenzo Maggiorelli
In the last decades China has been able
to increase its influence on global affairs and
development, due to its rapid expansion of
GDP and trade volumes, through several
channels which include its foreign aid and
strategic trade relationships, which in turn are
used as a tool to further its strategic interests
in developing regions such as Africa, South
Asia and Latin America. While substantial
research has been conducted in relation to
Chinese aid to Africa, its aid to Latin America
and the Caribbean (LAC) has been given
scarce consideration, despite the potential
influence of Chinese financial flows over the
region. In fact, upon entering the new century,
the assistance provided to Latin America has
sharply raised, both in terms of the number of
recipient countries and in amount. From 2005
to 2012, China has provided to Latin American
countries more than $87 billion USD in loans.
In 2010, China’s loan commitments to Latin
America of $37 billion USD were more for that
year than the combined World Bank’s, Inter-
American Development Bank’s and the United
States Export-Import Bank’s loans (Gallagher
et al., 2012). Actually, China pledged to direct
a quarter trillion dollars (250 billions) to the
region during the next decade (2015-2025)
(Watson, 2015).
This article has the objective to analyze the
evolution and prospects of Chinese foreign
aid to LAC. In the first section, it presents an
overview of its historical evolution, dividing the
history of aid provision by China in six phases,
each of which responds to different strategic
imperatives. The second section will take into
account the different quantitative measures and
estimates of Chinese aid, as well as the type of
projects implemented, including an attempt to
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quantify the amount of aid received by LAC as
compared to other developing regions. The third
section delves into the different motivations and
strategic interests of the Sino-Latin America
aid and trade relations, focusing on three main
groups of motives for providing aid: the need of
the recipient, the institutional characteristics of
the beneficiary, and the political and economic
interests of the donor country. The fourth section
provides an overview of the potential benefits,
as well as the negative effects, of Chinese
unconditional foreign aid and of its unbalanced
trade relationship with the region.
I. Six phases of Chinese aid to Latin
America and the Caribbean
After the Chinese Communist Party took
control of mainland China, after the defeat
and resettlement of the Nationalist Party to
Taiwan, the People’s Republic of China started
delivering foreign aid to developing nations
in 1950, by providing aid assistance to North
Korea.  Following the 1956 Bandung Asian-
African Conference, China extended its aid
(consisting of donations and interest-free
loans) to non-Communist countries, such as
Cambodia, Egypt and Nepal (Bartke, 1989).
Since then, six phases in China’s aid delivery
can be identified. I summarize them below.
i) The first phase of Chinese aid (1956-
1969) had been primarily motivated by political/
ideological considerations. Indeed, China
backed the independence movements of
African countries, and had used foreign aid to
sustain the struggle versus colonial powers
(Davies, 2007). On the other hand, the founding
principles of Chinese aid provision emphasized
the self-sufficiency of recipient nations, as
well as mutual benefit (Bartke, 1989; Dreher &
Fuchs, 2012); such doctrine was formalized in
1964 in the “Eight Principles for Economic Aid
and Technical Assistance to Other Countries”
(State Council, 2011). Latin American countries
were reluctant to establish diplomatic relations
with the People’s Republic of China in Beijing,
recognizing instead the Republic of China in
Taiwan as the legitimate government of the
Chinese people (Hearn & León-Manríquez,
2011, p.6). Between the 1950s and 1970s, in
fact, Latin American governments were steadily
anti-communist and pro-Washington, with the
only exception of Cuba; as such, Cuba was the
only Latin American nation to establish formal
diplomatic relations with China and to receive
its assistance. From 1959 (when Castro took
power in Cuba) to 1965, both countries signed
two five-year agreements and several annual
trade agreements under which China pledged to
support Cuba through preferential trade policies,
interest-free loans and material assistance,
among others (State Council, 2011).
ii) The 9th Congress of Chinese Communist
Party, held in 1969, is understood to be the
beginning of the second phase (1970-1978)
of Chinese aid;  since then, the quantity of aid
provided increased, in agreement with Chairman
Mao Zedong’s strategy of assuming political
guidance of the Third World. Such strategy
included the promotion and formation “of Maoist
factions in the Communist parties of Bolivia,
Brazil, Colombia, Peru, and others” (Hearn &
León-Manríquez, 2011, p.8).  Chinese attempts
to spread communist revolutions in the region
declined in the late 1970s, when negotiations
with Nixon’s presidency in the United States led
China to seek more friendly diplomatic ties with
developing countries (Hearn & León-Manríquez,
2011, p.9). In accordance with the claim of
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increased international recognition, in 1971
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
China substituted Taiwan in the UN Security
Council; supposedly, the flows of aid to the African
countries guaranteed the necessary support to
obtain this position (Davies, 2007). Following
the demise of Communist Party Vice-President
Lin Biao in 1973, nevertheless, foreign aid was
compressed under the leadership of Premier
Zhou Enlai (Bartke, 1989; Dreher & Fuchs,
2012). However, the 1970s were marked by
an increase in the number of countries that
established diplomatic relations with China,
as did the recipients of Chinese aid in the LAC
region, including Chile, Peru, Guyana, Jamaica,
and others. According to treaties signed between
China and these countries, the Asian country
offered loans without interest for cooperation
in sectors such as agriculture and textiles. In
addition, the Chinese Red Cross provided
financial assistance on numerous occasions to
Nicaragua, Honduras and Guatemala in Central
America to alleviate the aftermath of natural
disasters (State Council, 2011).
iii) The third phase (1979-89) of Chinese
aid began after the deaths of Mao Zedong
and Zhou Enlai in 1976, when Deng Xiaoping
assumed the direction of the Communist Party
of China in 1978. The new leader implemented
more pragmatic decisions about its foreign
policy (including revised aid policies) and
China opened its doors to the West. The
economic reform package (called “reform
and opening up”) began to introduce market
principles, as well as gradually granting access
to the Chinese economy to foreign capital
investment and international trade. Economic
concerns started to be more significant for
decisions on foreign aid budget allocation, and
China started to form stronger relationships
with developing regions.  Assistance to Latin
31
 America was characterized by numerous
Lorenzo Maggiorelli
small-scale individual projects, and “mutually
advantageous” programs were promoted
(OECD, 1987). China began to foster South-
South cooperation, as well as economic
and technological cooperation, both guided
by the principles of equality, mutual benefit,
effectiveness, diversification and common
development (State Council, 2011). Although
Chinese aid had initially offered aid in the
form of subsidies or long-term credits without
interest, the conditions in the 1980s became
stricter yet still advantageous for Latin
American countries, which in turn started their
own process of opening their economies to
the global market. It was during this decade
that China gave a new focus to its foreign aid,
emphasizing the improvement and maintaining
of existing programs (Bartke, 1989; Dreher &
Fuchs, 2012).
iv) The fourth phase (1990-1995) began
following the Tiananmen Square episode
in 1989, when China energetically pursued
diplomatic support and considerably boosted
its foreign aid. In particular, aid to African nations
increased (Taylor, 1998; Brautigam, 2008,
2010; Dreher & Fuchs, 2012).  In Africa, indeed,
responses to the slaughter were substantially
milder compared to reactions from the West, to
the extent that some African countries were even
supportive of the actions undertaken (Taylor,
1998). As  Taylor puts it (1998, p.450), such
aid policies were a “quick and comparatively
cheap way by which Beijing could reward
those countries that had stood by China”
during the crisis, in addition to strengthening
relationships.  On the other hand, in the late
1980s China strengthened its “checkbook
diplomacy”, as a reaction to Taiwan’s transition
to democracy, which led to an increased
32 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
recognition to the ROC; in fact, seven countries
(Belize, Guinea-Bissau, Nicaragua, Bahamas,
Grenada, Liberia, and Lesotho) switched back
their diplomatic recognition to Taiwan. Such a
rivalry produced sort of a “bidding war” in which
offers of aid by both sides escalated (Brautigam,
2010, p.11; Rich, 2009).  Additionally, after
the fall of the Soviet Union in 1990, Chinese
international relations became less ideological
(Hearn & León-Manríquez, 2011, p.12). The
literature stresses the importance of economic
considerations, which have increasingly
become China’s predominant aid strategy
(Davies, 2007; Pehnelt, 2007). In fact, Chinese
planners were conscious that the scarcity of
resources, mainly in domestic energy, could
rapidly hinder domestic production; to counter
that, they operated “to position the country to
overcome that challenge” (Brautigam, 2008,
p.11). Specifically, foreign aid restructurings of
1995 headed towards market-oriented attitudes
and highlighted the connection between aid,
commerce and investment (Brautigam, 2009;
Dreher & Fuchs, 2012).
v) Following this market-oriented
reform, China’s aid activities entered an entirely
different period compared to earlier stages
(Kobayashi, 2008, p.7; Dreher & Fuchs, 2012),
thus constituting the beginning for the fifth
phase (1996-2005). The central objective of
the reorganization was to increase the modes
of delivery of foreign financing to developing
nations. Apart of donations and interest-free
credits (flexible and rapid financing forms),
China also conceded preferential loans with
subsidized interest, together with joint ventures
and participation in comprehensive international
cooperation projects and programs. China
announced  a twofold increase in its aid effort
to Africa in order to “achieve the goal of
mutual benefit and  win-win  between China
and African countries» (Ministry of Commerce,
2007, p.416).  At the turn of the new century,
China underwent enormous development and
became one of the most important economies
in the world; it also increased the assistance it
provides to Latin America, both in the number
of receiving countries and in the amount
disbursed. In 2004, the Forum for Economic
and Trade Cooperation between China and the
region is established.
vi) The most recent era for China’s aid
program allegedly began in 2006, with China
announcing a “new strategic partnership”
in the context of the Forum of China-Africa
Cooperation (FOCAC), when  President Hu
Jintao proclaimed the creation of the China-
Africa Development Fund to advance Chinese
investment in Africa with US$1 billion,
expected to grow to US$5 billion, as well as
announcing to double its aid effort to Africa from
2006 to 2009, with the aim of achieving the goal
of mutual benefit and win-win between the PRC
and African nations (Ministry of Commerce,
2009, p.416).  China Forum, held in Beijing in 2015. This
The growing importance of the links between
China and Latin America and the Caribbean
can be identified in five milestones during the
most recent phase (2006-2016) (CEPAL, 2015,
p.6). The first one is the publication in 2008 of
the White Book on foreign relations between
China and the region, a policy paper in which
China exhibited at various points the orientation
of their aid policies and development of bilateral
relations, and explained its preliminary plans1.
A second milestone is the 2012 proposition
1
In the first  “Paper on China’s policy towards Latin
America and the Caribbean”,  the following preliminary
plans are explicated in five points: (1)  Continue to provide
economic and technological assistance without imposing
any political conditions and gradually increasing aid to the
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by Premier Wen Jiabao, during a visit to the
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
ECLAC (UN Economic Commission for Latin
America and the Caribbean), to strengthen
political, economic and cooperation relations
between China and LAC. A third turning point is
the ambitious cooperation framework for 2015-
2019, generally known as “1+3+6”, which was
proposed in 2014 in Brazil at the first Summit
of Leaders of China and LAC by President Xi
Jinping. In this plan, “1” stands for “one plan”,
referring to the 2015-2019 comprehensive
plan, aimed at achieving inclusive growth
and sustainable development; “3” stands for
“three engines”, indicating the promotion of
cooperation through trade, investment and
financial co-operation; “6”, finally, stands for
“six fields”, which refer to fostering industry
connection in six co-operation priorities (energy
and resources, infrastructure construction,
agriculture, manufacturing, scientific and
technological innovation, and information
technologies). The fourth milestone is the joint
adoption of the Cooperation Plan 2015-2019,
at the First Ministerial Meeting of the CELAC2-
best of its ability, according to the needs of Latin American
countries. (2) Actively explore with relevant countries ways
to resolve their external debt problems with China in the
context of policies on debt reduction and debt elimination.
(3) Strongly respond to requests from Latin American
countries when urgent situations of humanitarian crisis arise
and promote and support the exchange and cooperation
between non-governmental organizations in China and
the Latin American region. (4) Implement technological
training programs in the agricultural, energy, health and
environmental protection sectors;  Provide technological
services and increase the number of government grants. (5)
Actively promote medical and health cooperation with Latin
American countries, continuing to send medical teams with
the appropriate materials and medicines to improve medical
facilities in the recipient countries (Ministry of Foreign
Affairs, 2008).
2
The CELAC, Community of Latin American and
Caribbean States (Spanish: Comunidad de Estados
Latinoamericanos y Caribeños), is a representative
bloc instituted in 2011 for the purpose of coordination,
harmonization and deepening of Latin American integration,
33
 document is a broad plan which considers
Lorenzo Maggiorelli
thirteen thematic areas of work, eight of which
are concentrated in economic areas3. However,
for the moment, this plan only indicates general
objectives and broad lines of action, that have to
be assumed to serve as a guideline for specific
initiatives and projects, which supposes a
strong challenge for politician and technicians,
in order to allow the deepening of the relation
and dialogue between CELAC and China; for
the time being, the Asian country established a
secretariat in order to monitor progress in such
areas. The fifth and most recent breakthrough
is the nine-day grand tour of official visits by
Prime Minister Li Keqiang to Latin America
(Brazil, Chile, Colombia, Peru and, finally, to
ECLAC headquarters in Santiago) in 2015,
where he made clear that, despite decelerating
growth on both sides of the Pacific, China will
be contributing much more to the region in
the forthcoming years, allocating many more
billions and promising the construction of a
trans-Amazon railway connecting Peru and
Brazil, to enable China to cheaply import
Brazilian iron and soy (CEPAL, 2015).
Regarding specifically the Caribbean
nations, at the II Forum on Economic and Trade
Cooperation between China and Caribbean
held in 2007, China defined its proposal on
the assistance it would provide in the following
three years to the countries of the region with
whom it maintains friendly relations. This
proposal included granting preferential loans
consisting of 33 sovereign countries in the region.
3
Areas of work concentrated on economic fields
are: Trade, Investment and Finance, Infrastructure and
Transport, Energy and natural resources, Agriculture,
Industry, Science and Technology, Aviation and the
Aerospace Industry, Human Resources Education and
Training, Tourism and Environmental Protection, Risk
Management and Disaster Reduction, Poverty Eradication
and Health.
34 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
worth 4,000 million yuan (more than 526 million
2007 USD), conducting training programs
for 2,000 people and sending agricultural
experts, Chinese language teachers and
medical teams to the region. After that, China
has been actively executing the aid measures
to Caribbean nations revealed at the III China-
Caribbean Economic and Trade Cooperation
Forum held in 2011. By the end of 2012,
under such framework, China had delivered
concessional loans (totaling 3 billion yuan,
450 million USD) to the Caribbean countries,
primarily for the construction of infrastructure
projects. Meanwhile, China trained over 500
officials and technical staff for the Caribbean
countries, and held training courses for these
countries, to establish earthquake and tsunami
early warning and monitoring systems. China
also built schools in Antigua & Barbuda and
Dominica, sent medical teams and trained
local medical staff in Dominica, and completed
technical cooperation projects in agriculture
and fishery in Dominica, Grenada and Cuba
(State Council, 2014).
II. Amount and type of Chinese aid
to Latin America and the Caribbean
Quantifying Chinese aid - When conducting
empirical research on Chinese aid budget
allocation, the main operative problem is that
the Chinese government declines to publish
full information on its annual bilateral aid
allocations. Hence, estimations of the total size
of China’s aid flows vary considerably. Part of
the variation is stemming from the different
delimitations of which flows are considered as
development aid and which are not. Estimates
show that Chinese aid has rapidly increased
during the past decade. The United Kingdom’s as the world’s largest provider of overseas

Department for International Development
(DFID), estimates aid for Africa amounting
to US$1.3-1.4 in 2006; professor Qi (2007)
estimates that aid for Africa in 2007 was worth
US$1.05 billion, being US$1.38 China’s total
aid budget for that year. Between 2000 and
2013, Chinese development finance datasets
show 2,312 projects in 50 countries, totaling
$94.31 billion. According to the Financial Times’
estimates, China outperformed the World Bank
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
loans to developing countries through its China
Development Bank and China Export-Import
Bank, amounting to at least US$110 billion in
2009 and 2010.
According to the Inter-American Dialogue
database, during the sixth phase (2006-2016)
China gave growing amounts of loans to the
region (see Fig.1 below) covering different
areas (in particular infrastructure, energy, and
mining).

Fig.1 - Total amount of loans from China to Latin America and the Caribbean (2005-2016)

Source: Compiled by the author based on data from Gallagher & Myers (2016)

Venezuela is by far the country that has
received the most loans from the PRC in the
region, with 17 loans totaling $62,2 billion.
Brazil was second, with ten loans totaling $36.8
billion, followed by Argentina (8 loans, $15.3
billion), Ecuador (13 loans, $17.4 billion), and
Bolivia (10 loans, $3.5 billion) (Gallagher &
Myers, 2016). Figures for the period 2006-2016
are presented in Table 1 below.

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35
 Table 1 - Loans provided by China to countries of Latin America and the Caribbean in the sixth phase of
Lorenzo Maggiorelli
Chinese aid (2006-2016)
Country
Venezuela
Brazil
Ecuador
Argentina
Bolivia
Trinidad & Tobago
Jamaica
Mexico
Costa Rica
Barbados
Guyana
Bahamas
Peru
Source: Compiled by the author based on data from Gallagher & Myers (2016)
With the intention of silencing objections that
China does not provide sufficient information
on its aid program, the Chinese government
published two White Papers on China’s Foreign
Aid in 2011 and 2014 (State Council, 2011,
2014; Dreher & Fuchs, 2012). According to
these official documents, China has provided
aid to 161 countries until 2009, of which 123
developing countries received aid on a regular
basis. This corresponds to 256.29 billion yuan
($38.54 billion USD), of which 41.4% were
provided as grants, 29.9% as interest-free
loans, and 28.7% in the form of concessional
loans (State Council, 2011). From 2010 to
2012, China provided assistance to 121
countries: 30 in Asia, 51 in Africa, 9 in Oceania,
19 in Latin America and the Caribbean and
12 in Europe. China allocated a total of 89.34
billion yuan (14.41 billion U.S. dollars) for
foreign assistance. Grants were 36.2 percent
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Number of Loans Amount (USD millions)
17 62,200
10 36,800
13 17,400
8 15,300
10 3,500
2 2,600
10 1,800
1 1,000
1 395
1 170
1 130
2 99
1 50
of the total assistance volume (32.32 billion
yuan, 4.8 billion USD), interest-free loans were
8.1 percent of its foreign assistance volume
(7.26 billion yuan, approximately 1 billion USD),
concessional loans amounted to 55.7 percent
of the total (49.76 billion yuan, 7 billion USD)
in the same period (State Council, 2014). Still,
it is not clear which financial flows are included
in these calculations. Missing information
on the degree of concessionality of Chinese
loans makes it difficult to apply the definition of
official development assistance (ODA) from the
DAC4. For this reason, few econometric studies
have verified the causal mechanisms behind
Chinese aid with hard data, and speculative
4
Official Development Aid (ODA) is defined as
concessional financial flows to developing countries that
are provided by official agencies, with the objective to
promote economic development and welfare and that
contain a grant element of at least 25%.
(http://www.oecd.org/dataoecd/26/14/26415658.PDF).
claims about foreign aid from China remain
mostly unchallenged.
AidData (Hawkins, 2010) provides
project-level data for non-OECD suppliers of
international development finance, such as
China, Saudi Arabia, and Qatar, which do not
publish their own project-level data. In particular,
they have tracked Chinese development
finance to African countries for 2000 thru 2012,
and used these methods to create a detailed
project-level database of official Chinese
development finance flows to Africa from
2000 to 2012. This database includes more
than 1,950 pledged, initiated, and completed
projects, worth over $84 billion USD. Dreher
& Fuchs (2012) make use of AidData and
various other datasets covering 1956-2006,
to empirically test to which extent political and
commercial interests shape China’s global
Figure 1 – Volatility of Chinese aid across time (number of projects completed, and amount of aid in millions
constant 2000 USD)
Source: Dreher and Fuchs (2012)
When conducting econometric research
about foreign aid budget allocation, Gupta et al.
(2006) recommend grouping foreign aid budget
allocation and projects by phases, and not by
single year, due to aid volatility. Following this
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aid allocation decisions. They estimate the
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
determinants of China’s allocation of project aid,
food aid, medical staff and total aid money to all
developing countries, comparing its allocation
decisions with traditional and other so-called
emerging donors; these authors conclude
that political considerations are an important
determinant of global China’s allocation of aid
and that it remains independent of democracy
and governance in recipient countries. They
also find no evidence that China’s aid allocation
is dominated by natural resource endowments.
Another difficulty in doing econometric
analysis of foreign aid is that global aid suffers
great volatility: amounts of aid allocated each
year, in general, vary substantially. Chinese
aid is no exception, as shown by Figure 1,
presenting a wide volatility in both the number
of project completed and aid amounts.
suggestion, I estimate the relative importance
of each region of the developing world for
China foreign aid budget allocation in the six
phases described in the first section, using
datasets from Dreher and Fuchs (2012) and
37
 AidData (Hawkins, 2010). Conducting this
Lorenzo Maggiorelli
exercise allows to visually represent the relative
Figure 3 – Chinese aid to different developing regions (number of completed projects as % of total)
As illustrated in Figure 3, Sub-Saharan
Africa is constantly the greatest recipient of
Chinese project aid, accounting for more than
40% of projects throughout all phases. East
Asia and Pacific, important due to geographical
proximity, is the second region most benefitted,
in the first, fifth and sixth phases. Latin America
and the Caribbean received less aid than both
the Middle East and North Africa and South
Asia in the first three phases, until the fall of
Soviet Union. It is only after 1990 that China
increased the relative number of projects in
the LAC region, which is in line with those
regions in the fourth, fifth and sixth phases,
obtaining around 10% of total Chinese aid
projects. Coming to the amounts of aid, as
shown by Figure 4 below, we can see that the
share of Chinese aid allocated to Latin America
38 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
importance of Latin America and the Caribbean
across time, as compared to other developing
regions.
and Caribbean has passed from less than
5% to 20% of its total budget, and it is now
comparable with the amount of aid received by
Sub-Saharan Africa. These combined figures
show that Chinese aid has a special focus on
Sub-Saharan Africa, especially regarding the
number of projects; nevertheless, it maintains
a global outlook, providing substantial levels of
aid to all developing regions. Looking at LAC
in particular, we can appreciate that while the
share of aid projects remained substantially
constant, the amount of aid provided has
sharply increased in the last decade, reflecting
the fact that greater attention is dedicated to the
region, and bigger financial flows are dedicated
by China to LAC, both in absolute terms and
relative to the rest of the world.
 Figure 4 – Chinese aid to different developing regions (number of completed projects as % of total)
Types of aid - Beginning in the 1990s, the
reform of methods for providing aid to the
outside world was deepened, diversifying and
making them more flexible.  The types of aid
provided by China to the countries of Latin
America and the Caribbean can be divided
into six types: (i) humanitarian assistance, (ii)
free material assistance, (iii) preferential loans,
(iv) infrastructure construction, (v) vocational
training programs and (vi) support to local
organizations. They are summarized below:
i) First, humanitarian assistance was rapidly
developed in emergency situations. China
provided timely assistance, both financially
and through donations/shipments of medical
equipment, among others. Between 2003 and
2010, according to Chinese State Council, China
has provided this type of assistance on more than
30 occasions to countries in Latin America and the
Caribbean, including Cuba, Costa Rica, Mexico,
Peru, Chile and Haiti. Of these, and despite having
Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
not yet established formal diplomatic relations
with China, Haiti was conceded 93 million yuan
(approximately 13.7 million 2010 USD) after the
devastating earthquake of 2010 (State Council,
2011). In 2012, China helped Cuba to relief the
consequences of hurricane Sandy, providing 100
tons of humanitarian aid (State Council, 2014)
ii) There has also been a significant increase
in free material assistance. According to official
data, in the 1990s, China made over 30 donations
of industrial supplies, such as bicycles,
agricultural and/or medical equipment, among
others; between 2000 and 2008, this type of aid
has multiplied, registering almost 50 donations,
including telecommunications equipment,
office supplies, cultural and sporting goods, and
others, with an increasingly high technological
content (State Council, 2011). Between
2010 and 2012, under the Strengthening
Environmental Protection program addressing
climate change, China donated energy-efficient
39
 products to the Caribbean island of Grenada
Lorenzo Maggiorelli
(State Council, 2014).
iii) Preferential loans play a predominant role
in foreign aid. Prior to 1995, China’s assistance
to Latin America consisted primarily of interest-
free loans. Since the end of the 1990s,
especially between 2003 and 2008, aid has
been extended to preferential loans which has
been granted on 23 occasions to 11 countries,
including the Bahamas, Guyana, Suriname and
Bolivia. As for the reduction and elimination of
foreign debt, in 2006 China cancelled all the
debts of Guyana (which had expired at the end
of 2004) and two debts of Bolivia (which were
due to expire in 2007) (State Council, 2011).
iv) Fourth, between 2003 and 2008,
China has carried out several infrastructure
construction projects in Latin America. Among
the more than 40 works of this type carried out
in 15 countries (such as Cuba, the Bahamas
or Granada), the projects that stand out the
most are the stadiums, convention centers,
highways, hydroelectric power stations,
hospitals and agricultural production centers
(State Council, 2011). By 2012, China had
offered concessional loans for the construction
of infrastructure projects in the Caribbean
nations, totaling 3 billion yuan (450 million
USD) (State Council, 2014).
v) Vocational training programs have also
increased, becoming an important element
of China’s external assistance to Latin
America and the Caribbean, focusing on
sectors such as agriculture, mining, trade and
administration. The implementation of these
training programs has been accompanied by the
participation of many young Chinese volunteers
to provide assistance in diverse fields such as
education, agriculture and medicine (State
Council, 2011).
40 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
vi) Sixth and last, China has begun to
provide assistance to local Latin American
organizations: between 1998 and 2002, China
made numerous donations to the Caribbean
Development Bank; in July 2005, they donated
computer equipment to the secretariat of
the Andean Community;  between 2005 and
2009, a $ 2million USD grant established the
China-Organization of American States (OAS)
fund;  finally, in January 2009 China donated
$350 USD million to the Inter-American
Development Bank to support economic
development and poverty reduction in Latin
America and the Caribbean (State Council,
2011).
III. Motivations behind China’s aid
allocation
China prides itself that its aid is
unconditional, not linked to conditions normally
imposed by Western donors, such as good
practices, democracy and/or respect for human
rights. In addition, Chinese financial assistance
usually becomes readily available, without
much bureaucracy (Davies, 2007). China
therefore constitutes a good alternative to the
donors of the OECD’s Development Assistance
Committee (DAC-CAD), with their very detailed
bureaucratic procedures and conditionality
policies. The best evidence of the preference
for unconditional aid in Africa is the case of
Angola, a country with very high levels of
corruption, which has big difficulties to access
Western aid; unsurprisingly, a major recipient
of Chinese aid5. In Latin America, for instance,
5
In the early 2000s, Angola rejected a conditional
loan from the IMF, finding instead a more attractive
“unconditional” loan from China, valued at 2 billion USD. In
turn, Angola provided 40 thousand oil barrels to China per
day (Sun, 2014).
Chinese aid to Venezuela has occupied the void
generated by the shortage of loans by the World
Bank. Nevertheless, unconditional aid to oil-
rich countries such as Venezuela and Angola
can increase the risk of political disruption
and corruption (Sanderson, 2013; Ellis, 2009;
Brautigam, 2009). At the same time, China’s
development aid is criticized for being driven
by domestic economic and political interests, to
a greater extent than development assistance
from traditional DAC donors.
The motives that generally move all donor
countries to the granting of international aid can
be grouped into three categories: (i) first, aid
must depend on need of recipients; (ii) secondly,
the quality of recipient’s policies and institutions
could be important;  and (iii) third, the donor’s
own political and commercial interests play
a role (Alesina & Dollar, 2000).  The following
paragraphs discuss these three groups of
motives, focusing on the case of China.
i) In relation to poverty and development, the
Ministry of Commerce (1985, p.413) stresses
how its aid projects play “a positive role in
the expansion of the national economies of
the recipient countries and the improvement
of the material and cultural life of people in
these countries”. The Ministry emphasizes the
idea of​ “mutual benefit”, in order to develop
national economies of recipient countries and
to promote economic growth both in China
and those countries (Ministry of Commerce,
1985, p.413). The Chinese State Council
underlines how the budget allocation of its aid
meets the needs of the recipients, saying that
China assigns primary importance to recipient
countries living conditions and economic
development, setting efforts to ensure that its
foreign aid benefits as many people in need as
possible (State Council, 2011, p.6). Brautigam
Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
(2008) points out that China uses its foreign aid
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
to show its vision-of-self as a great power that is
responsible, meaningful, fast in humanitarian aid
delivery (p.7). Chinese focus on infrastructure
projects could assess development needs
largely neglected by DAC donors (Brautigam,
2008). However, these views contradict to a
large extent what is argued by Naim (2007),
that “rogue” donors like China don’t care about
the long-term well-being of the population of
recipient countries (p.95).
ii) The second group of motivations to donate
aid is related to the quality of institutions and the
governance of recipient countries. This is true
when we talk about donor countries from the
West, for two main reasons. First, (a) traditional
donor countries use aid as an incentive
mechanism for recipient countries with good
institutions;  for example, Öhler et al. (2012)
find that aid conditional on “good governance”
leads to incentives for potential recipient
countries to improve their anti-corruption
controls. Nevertheless, others raise questions
about the effectiveness of aid for the promotion
of democracy and governance (Knack, 2004,
Busse and Gröning, 2009). Second, (b)
traditional donors may follow a general belief
that aid is more effective when it is assigned to
recipients with more rigorous economic policies
(Burnside and Dollar 2000), although there is
not enough empirical evidence to support this
relationship (Easterly et al., 2004). In contrast
to the motivations of Western donors’ aid, one
of the fundamental principles of China’s aid
policy, and in general for its foreign policy, is the
principle of non-interference in domestic affairs
and respect for national sovereignty of recipient
countries (Davies, 2007; Brautigam, 2008;
Dreher & Fuchs, 2012).  As such, Chinese aid
allocation is unrelated to the form of regime and
41
 quality of governance of recipients. The Ministry
Lorenzo Maggiorelli
of Commerce (1990, p.63) states that China
has “full respect” for the sovereignty of recipient
countries, and doesn’t attach any condition
or ask for any privilege, maintaining the “true
spirit of sincere cooperation”.  Therefore, we
can conclude that Chinese aid is probably not
affected by the institutional and governance
quality of recipient countries. Others have
even argued that China, priding itself over its
“no-strings-attached” approach tends to focus
instead on recipients with fairly bad governance
(Halper, 2010), providing assistance to
unstable problematic regions and “delinquent
states” (Pehnelt, 2007, p.8). In fact, China
gives considerable amounts of aid to fragile
states (Kaplinsky et al, 2007; Bermeo, 2011).
It has been argued that the absence of any
conditionality of Chinese aid could weaken
democracy, governance and human rights, limit
development, weaken social and environmental
standards, and increase corruption (Davies
2007). According to Taylor (1998), in fact, China
has opposed democratization in Africa, since it
could use the failure of democratic consolidation
as an argument against domestic demands for
democratization.  As Deng Xiaoping said,  “talk
about human rights, freedom and democracy
is only designed to safeguard the interests of
the strong, rich countries [who] practice power
politics”  (as quoted by Taylor, 1998, p.453).
However, it is debatable whether China’s aid
differs significantly from the distribution of
DAC aid in terms of rewarding countries with
better governance: earlier studies reveal a
considerable difference between the rhetoric
of DAC and its effective allocation of aid. For
example, Germany, Finland, France, Japan and
the Netherlands give the most corrupt countries
more aid, not less (Isopi & Mattesini, 2010).  Jintao promised to invest over a 10-year period
42 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
iii) Finally, the offering of foreign assistance
is composed of (a) economic and (b) political
motives. On the one hand, (a) in terms of its own
economic and commercial interests, everything
that facilitates the export of natural resources
to China is seen as a central objective of its
aid; China’s “insatiable needs” for resources
(hydrocarbons, minerals, and timber in
particular) are more often cited as trade-related
reasons for Chinese foreign aid (Alden, 2005;
Davies, 2007; Naim, 2007; Halper, 2010). The
Chinese Ministry of Commerce is the lead
agency for the provision of bilateral aid: this
clearly indicates the paramount importance of
trade ratios for China. Lum et al. (2009) suggest
that Chinese aid to Africa and Latin America is
determined by economic interests, motivated
mainly by the extraction of natural resources.
The vast majority of Latin American exports to
China have focused on three areas: soy, metals
and hydrocarbons. In fact, only three products
(copper, iron and soy) account for more than
half of Latin American exports to China. Chinese
trade’s exponential growth has created strong
ties with Latin America and potential to become
a key trading partner. Brazil has become the
third largest exporter of iron to China, while Chile
and Peru account for 50% of Chinese imports of
copper. In 2009, seeking increased oil exports,
the Chinese government approved a $20 billion
credit to Venezuela and purchased the Brazilian
share of Repsol (a Spanish oil company) for
$7.1 billion USD, with the aim of developing
oil deposits in Brazil (Dowsett & Chen, 2010).
Furthermore, Gallagher (2012) estimates that
loans-for-oil constitute more than two-thirds of
Chinese loans to Latin America. This process
of increasing Chinese investments in Latin
America began in 2004, when President Hu
intending to reach bilateral trade of $100 billion export markets and profitable investments6

Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
USD. Surprisingly, this mark was surpassed (Davies, 2007; Lum et al., 2009). Devlin
much earlier, as bilateral trade had already (2007) provides statistics about the one-sided
reached $140 billion in 2008 and $261.6 billion relationship, describing how Chile, Argentina,
USD in 2014. At the moment, the US remains and Mexico were the only Latin American
the main economic partner of the region; China countries among China’s top 40 suppliers
surpassed the European Union as the second in 2002, altogether accounting for just 1.3
largest trading partner in Latin America in 2014 percent of total imports. On the contrary,
(two years earlier than what CEPAL predicted Latin America has become the most dynamic
in 2011), and could even surpass the US by export market for Chinese products, with an
2030 (Hakim and Myers, 2014). Nevertheless, annual growth of 31% between 2005 and
Latin America’s lack of diversification and 2010, versus 16% for the rest of the world
dependence on products exported to China (Toro, 2013; Smith et al., 2013; Gallagher,
has exacerbated the region’s vulnerability to 2008); thus the Sino-Latin American trade is
commodity price fluctuations, as up to 74% of characterized by a substantial trade deficit.
all Latin American exports to China are primary
commodities (Gallagher, 2010). In contrast, the
majority of Chinese exports to Latin America
are from the manufacturing sector with a strong
emphasis on electronics and vehicles; such
industries, as compared to commodities, are
much less prone to price volatility, evidencing an
asymmetric trade relationship. As some scholars
put it, Chinese trade is pushing Latin America
into a “raw materials corner”. More bluntly,
Chinese focus on Latin American raw materials
and the flood of cheap Chinese products is
precluding the diversification of the exporting
industries of Latin American nations, since it is
more lucrative to merely sell raw materials to
China than encourage entrepreneurship and
diversification of the economy, thus stimulating
an unfavorable “overdependence on natural
resource exports”. As the NAFTA negotiator
from Nicaragua put it, “China is an awakening
monster that can eat us” (as cited in Gallagher
& Porzecanski, 2008, p.185).
In addition to secure resources, Chinese 6
Medical care, for example, is seen as a tool to enhance
aid is accused of directing future access to the reputation of Chinese medicine and as “a smart, low-
cost way to introduce Chinese-made drugs to the African
market” (Shinn, 2006).

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43
 Figure 4 - China-LAC bilateral trade
Lorenzo Maggiorelli
China’s exports to world regions
China’s imports from world regions
Source: CEPAL, 2009; Leiteritz, 2012.
Furthermore, most Chinese aid is “tied
aid”, which is another indication that China
uses foreign aid to improve its business
opportunities (Pehnelt, 2007; Schüller et al.,
2010).  For instance, when China funded
the construction of 2.2 billion USD dam in
Ecuador, over 1,000 Chinese engineers and
workers were deployed to the Latin American
country, rather than hiring Ecuadorian workers
(Krauss & Bradsher, 2015). The Ministry of
Trade (1999) openly concluded that, through
aid, Chinese  enterprises  entered developing
countries’ markets very quickly and were
welcomed by those countries’ governments
and enterprises (p.75).
44 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
Product composition of LAC exports to China
Product composition of China’s exports to LAC
On the other hand, (b) regarding the political
motivations of China’s aid allocation, the
Ministry of Commerce (1996) openly admits
that aid and subsidies are used to coordinate
diplomatic work, and that building “some
public institutions [...] produced great political
influences” (p.70).  The aid program is aimed
at supporting diplomatic high - level events:
for example, to achieve greater participation
of heads of State in the ceremonies of the
2008 Beijing Olympics, China speeded up the
implementation of the projects most valued
by bilateral leaders (Ministry of Commerce,
2009, p.348). However, according to the State
Council (2011), China “never uses foreign aid
as a means to [...] seek political privileges for
itself” (p.3). As a matter of fact, the literature America, which maintain this arrangement

has paid particular attention to the political
motivation of allocating aid from China. For
instance, Africa is important for China’s political
agenda and building alliances, as it supported
the People’s Republic to represent China at
the United Nations instead of Taiwan (Davies,
2007, p.27). Taiwan, considered by China a
nonaligned province, has diplomatic relations
with only twenty countries, with embassies,
trade agreements and foreign aid, which
strengthen Taiwan’s effective sovereignty. The
largest group of those countries (eleven, as
shown by Table 1 below) is in Latin America
and the Caribbean, particularly in Central
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
because Taiwan spends heavily to maintain it.
Nevertheless, Taiwan can difficultly outspend
mainland China, which uses the aid to impose
its “One China policy”, rewarding countries
that do not recognize Taiwan as a separate
country (Taylor, 1998; Brautigam, 2008, Rich,
2009). That has been evident in LAC, where
China invested in costly projects, sometimes in
exchange for ending diplomatic relations with
Taiwan; Panama, has been the latest country in
switching recognition from Taiwan to the PRC in
June 2017. However, despite the “one China”
policy, the PRC also provides aid to countries
that recognize Taiwan (Davies, 2007).

Table 2 – Countries recognizing the PRC or the ROC in Latin America and the Caribbean in June 2017

Countries recognizing Countries recognizing

the PRC (China) the ROC (Taiwan)
El Salvador, Guatemala, Honduras,
Central America Mexico, Costa Rica, Panama
Nicaragua
Antigua & Barbuda, Bahamas,
Belize, Dominican Republic, Haiti, St.
Barbados, Cuba, Dominica, Gre-
Caribbean Kitts & Nevis, St. Lucia, St. Vincent &
nada, Guyana, Jamaica, Suriname,
the Grenadines
Trinidad & Tobago
Argentina, Bolivia, Brazil, Chile,
South America Colombia, Ecuador, Peru, Uruguay, Paraguay
Venezuela

Source: Compiled by the author based on information from the Ministry of Foreign Relations of the Republic of China
(Taiwan) website: http://www.mofa.gov.tw/

Finally, because of its problematic human
rights record, China has supported African
countries to play an important role in preventing
sanctions against the Asian country (Lancaster,
2007) in organizations such as the UN Human
Rights Commission. China, in fact, seems
determined to increase its influence in such
international organizations (Taylor, 1998), in
order to “build coalitions to protect Beijing from
criticism from the West” (Tull, 2006, p.460).
In summary, there are four main factors that
encompass the economic and political interests
of China in Latin America and the Caribbean
(Ellis, 2009): (1) acquiring primary products,
(2) cultivating markets for Chinese exports, (3)
gaining international isolation of Taiwan, and (4)
securing strategic alliance with Latin America.
However, following the win-win doctrine of
Chinese foreign aid, Latin America also fulfils
its own strategic interests in its relationship with

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45
 China, for three reasons: (1) creating export-
Lorenzo Maggiorelli
led economic growth, (2) attracting investment
in hydrocarbon exploration and development,
and (3) counterbalancing the hegemony of
the United States (Ellis, 2009; Hearn & León-
Manríquez, 2011).
IV. Potential developments
Chinese aid has been considered as the
most “rogue” aid among new donors (Naim,
2007), since it is used to gain diplomatic and
political support on the international scene,
it is allocated in order to gain access to raw
materials and natural resources and open new
markets for its own manufactured products, and
it is assigned to fragile and corrupt countries
undermining the effort of western donors
towards better governance and rule of law.
However, aid from DAC and other emerging
donors has been found to be motivated by
political self-interest as well. While all donors
use aid to further their strategic interests,
China is more open in stressing that its aid is
favoring its own model of development and
that it is aimed at mutual benefit. It is clear
that Chinese cooperation with LAC doesn’t
follow the traditional rhetoric of giving aid
on a humanitarian basis, but it privileges a
South-South cooperation approach, based
on the exchange of resources, technology,
and knowledge between developing countries
perceived as equals, and without obligations
(since there is no colonial history among
them). China’s commitment to such approach
is underlined by the fact that the first time that
Chinese Government has signed an agreement
with a multilateral partner, the United Nations
Development Programme (UNDP) in 2010,
it has been with the aim of strengthening
46 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
South-South cooperation. As president Xi
Jinping himself described it, while chairing a a
South-South meeting at the UN, South-South
cooperation is “a great pioneering measure
uniting the developing nations together for self-
improvement, is featured by equality, mutual
trust, mutual benefit, win-win result, solidarity
and mutual assistance and can help developing
nations pave a new path for development
and prosperity” and “as the overall strength
of developing nations improves, the South-
South cooperation is set to play a bigger role
in promoting the collective rise of developing
countries.” 7 Indeed, the relationship between
China and Latin America and the Caribbean in
the past decades can indeed be described as
a win-win relation: while Latin America needs
Chinese foreign aid money and needs a buyer
for its abundant raw materials, China needs
natural resources and wants to enter developing
markets to place its manufactured products.
As it has been suggested in the course of this
article, LAC experimented both positive and
negative impacts from Chinese foreign aid
and bilateral trade. Positive impacts include an
increased funding for a number of infrastructure
project and increased trade revenues.
However, negative impacts could potentially
outweigh positive effects: the imbalances in
the relationship and the fluctuations in the
raw material demand and prices, show that
China alone may not be enough to sustain
the development of entire economies in the
region, which risk falling in the “resource curse”.
Chinese money also influences the stability
and the transparency of the region: on the one
hand, Chinese aid may help to sustain corrupt,
7
from “China’s boost to South-South cooperation”
by Martin Khor, published in SouthViews No. 119, 10
November 2015.
unethical and inefficient regimes; on the other
hand, it may also contribute to the stability of
regimes more committed to democracy. As
such, the tendencies of retrogression into
undiversified and deindustrialized economies
dependent on non-renewable raw resources
and the increase of corruption prompted by
Chinese unconditional aid and unbalanced
trade, could undermine the efforts of traditional
donors (i.e. World Bank and IMF) towards better
governance in the region.
Some authors are optimistic (Devlin, 2007;
Toro, 2013) and hypothesize that Chinese
aid and trade can sustain the development of
Latin America and the Caribbean, providing
economic growth, a strategic economic model
and a strong trade partner. The World Bank (De
la Torre et al., 2011) supports the hypothesis
of a sustained long-term economic growth
“made in China” even after the 2008 economic
crisis, assuming that Chinese growth is long-
lasting and stable. In fact, the growing relation
between China and LAC provides an historic
opportunity to the region for unprecedented
progress to rebalance its gaps in productivity,
innovation, infrastructure, logistics, and
capacity-building. Cooperation with China,
in the context of the 2015-2019 Cooperation
Plan, could lead to a rethinking of the regional
industrial policy, leading to a greater processing
of raw materials, better linked to manufacturing
and services sectors, and fuelling intraregional
trade (Leiteritz, 2012).
Others authors, on the contrary, have a
more pessimistic approach, and maintain that
Chinese unconditional aid and trade, while
triggering short-term growths in Latin American
economies, will not be able to sustain them in
the long-term. Chinese “no-strings attached”
approach towards developing regions is
Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
detrimental of business’s best-practices,
Chinese Aid to Latin America and the Caribbean: Evolution and Prospects
human rights and good governance (Roett
& Paz, 2008, Curran, 2016). Unconditional
aid will continue to represent an alternative
to conditional Western foreign aid, hindering
governance reforms and allowing corruption and
inefficiencies to survive, especially in resource
rich countries. Furthermore, a concentration
on raw resources combined with an increased
competition from China in manufacturing
markets could discourage innovative
technologies and productivity, sparking fears of
“deindustrialization” in the region, in particular
in Brazil and Chile (Hearn & León-Manríquez,
2011, p.246). The deceleration of Chinese
economy (which “only” grew by a 7% in 2015
and by 6.9% in 2016), slowing down Chinese
demand of raw materials and causing a drop
in their price, intensifies doubts about long-
term sustainability of the Sino-Latin American
relationship.
Conclusion
During the last decade, China has risen as
a very visible actor in Latin America and the
Caribbean (LAC). It has done so in a variety
of manners, mainly through its foreign aid, its
investments and its bilateral trade. The first
section of this article provided an overview of
the historical evolution of Chinese aid to the
region, showing how Chinese cooperation,
from a series of small actions directed mainly
to communist countries all around the world,
became a full scale worldwide aid program,
active in all regions of the developing world;
furthermore, it summarized the approach to
cooperation with LAC for each phase. The
second section of this article offered an attempt
to quantify the amount of Chinese aid received
47
 by LAC as compared to other developing to talk of a long term sustainable advancement,
Lorenzo Maggiorelli

regions, confirming the worldwide approach unless LAC governments succeed in diversifying
of Chinese aid. It also showed that while Sub- their economies, avoiding exposing themselves
Saharan Africa is by far the region receiving to drops in the price of natural resources.
the most aid in terms of aid projects, in the last Undoubtedly China will be a long-lasting ally
decade Latin America and the Caribbean has to the region and partnerships with China are
seen its share sharply rise in terms of amount not to fear; however, there is a relatively high
of aid allocated, passing from less than 5% possibility of difficult times ahead, and LAC
to 20% of total Chinese aid budget. The third governments need to take steps to be prepared
section assessed three main group of motives beforehand.
which may drive China to provide aid: though
the need of the recipient and the institutional
characteristics of the beneficiary are not
relevant, political motives such the recognition
of Taiwan may have an effect; furthermore,
Chinese aid is openly directed to benefit the
economic and commercial interests of the
donor country, especially regarding its energy
and raw material needs. In fact, privileging a
South-South cooperation approach (which
diverges from the classical humanitarian
model of aid), Chinese official policy is formally
described as a win-win approach: on the one
hand China strongly needs big amounts of oil
and raw materials for its energy and production
needs; on the other hand, LAC need a buyer
for their abundant natural resources, and they
also need Chinese foreign aid and investments
for their development goals. Finally, the fourth
section consisted in an appraisal of the
potential benefits and negative impacts of the
Sino-LAC relationship, finding among potential
concerns the unconditionality of Chinese
foreign aid and its unbalanced trade relationship
with the region. In light of the strategic and
economic comprehensive analysis of Chinese
unconditional aid and bilateral trade to Latin
America and the Caribbean, we may conclude
that China certainly provides short and medium
term growth to the region, but it is more difficult
48 Revista Internacional de Cooperación y Desarrollo Vol. 4 No. 2 | Año 2017 | pág: 28-50
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